Unitas National Bank's commercial loan department has found that it doesn't need the latest and greatest technology to speed up its credit evaluation process.

he $150 million-asset institution in Chambersburg, Pa., has made that discovery in the 18 months it has been using Fiscal, a credit analysis program developed by The Halcyon Group of Charleston, S.C.

The system runs on a run-of-the-mill personal computer and is completely menu driven. Using the program saves enormous amounts of time in determining the financial health of a loan applicant's organization as well as the efficiency of the borrower' s operation, according to David Bishop, the bank's credit analyst,.

"Once we get the application, I enter the data into the system and the numbers are automatically crunched;' he said. "The program has taken a tedious process that used to take eight to 10 hours, into a simple procedure which takes 20 minutes."

Earlier this year, the bank's holding company, United National Bancorp., entered into a merger agreement with First Commonwealth Financial Corp. of Indiana, Pa.

Both of United National's units -- Unitas National Bank and Unitas Mortgage Corp.are to become independent affiliates of First Commonwealth.

In a statement released at the time the merger was announced, Robert Williams, United National's president and chief executive, called it "the best option" to serve the long-term needs of its shareholders, customers, and employees.

"The philosophy of first Commonwealth is to maintain the independence and local identity of each of the banks which it as the holding company owns," he said. "As such, Unitas will remain an independent operating bank with the same officers, employees, and office locations."

James Trimarchi, chairman and chief executive officer of First Commonwealth, said in the same statement that he sees the merger as a solid tool to lead his company's expansion into growing markets in south central Pennsylvania and north central Maryland.

The deal is valued at more than $26 million or $34 a share for United National at the market price of First Commonwealth common stock.

Elizabeth Summers, a vice president at Ryan, Beck & Co., a West Orange, N.J. securities firm, said she views this merger as part of the ongoing consolidation trend in the industry.

"There are two types of banks in the industry right now; ones that are making acquisitions and ones that are being acquired," she said. "The industry has come to a point of overcapacity, and they all can't survive. The key to survival is increasing market share, and one of the easiest ways to do that is to make acquisitions."

Through the merger, which is to be completed by the end of the month, Unitas will become a wholly owned subsidiary of First Commonwealth and will retain its name and existing operation.

As such, Mr. Bishop expects that it will be business as usual for commercial lending and that the bank will continue to look to technology as a tool to further its growth.

He said, in most cases the bank can turn around a commercial loan application within 48 hours compared to three days before it started using the system.

The loans --made primarily to local businesses -- generally range in size from $150,000 to $200,000. Commercial loans account for $25 million of Unitas' $130 million loan portfolio.

In order to make a decision on the loan application, Mr. Bishop must examine the applicant's financial information. Through the use of Fiscal, the raw numbers from either balance sheets or tax returns are crunched into a report which details the business' financial strength.

"Between 25% to 35% of all of the commercial loan applications that cross my desk rely on tax returns as their principal documentation," he said.' 'By using Fiscal we can analyze all of the financial data and make a credit decision a lot faster then working with a conventional spreadsheet."

Unlike some more advanced credit-granting software, Fiscal does not provide the bank with a credit score.

"Basically, we enter the information into the system and it spits out a report which gives a thorough picture of the financial strength of the company," Mr. Bishop said. "It gives me all the tools necessary to determine whether the loan is good or bad but it does not make the decision for me.

"Based on the information in the report from the system, we can make an educated decision as to whether we should make the loan or decline the application," he continued.

Typically, the loan application is reviewed by the loan officer and then sent to Mr. Bishop for an independent review.

"After I look over the loan information and determine the creditworthiness of the company, I sit with the loan officer and we come to a consensus on if we are going to make the loan or not," he said.

Mr. Bishop said that using the bank's previous method -- a standard spreadsheet to evaluate the five years of data for a company -- would take six to eight hours.

Now through the use of Fiscal, the same task can be done completed in 20 to 30 minutes and the information can be stored in a database for future business uses.

'The program will take the information and come up with all the ratios needed such as cash flows and assets divided by liabilities," he said. "It allows us to process the information about 20 times faster then we would have been able to through conventional methods."

The system also provides the bank with a feature to meet Comptroller's office requirements that call for yearly monitoring of a loan. To do this, it stores the loan's historical informarion, which then only needs to be updated on a yearly basis.

"I can keep all of the information on the system and meet the regulations while also always having the company's creditworthiness until it pays off.." Mr. Bishop said. "We don't have to keep reentering the data; it turns the updating of financial information and credit worthiness analysis into a quick process."

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